ypg
2016-06-26 22:23:28
- #1
Here are the most common reasons why building a house usually ends up more expensive than calculated, resulting in costly additional financing – summarized thoughts from the forum and real life, as well as situations experienced personally.
1. wrong basis of calculation
The best and worst example are the builders who start from the catalogue price, go to the bank, are told there are additional costs x, y, and z for the house construction. The sum is then financed. Later, during construction preparations, contract negotiations, and the start of building, it turns out that the catalogue price does not include the desired features.
A wrong basis also arises when prices are taken by hearsay without verifying them personally.
If builders exclude trades from the contract as standard because they think everything is cheaper online, they should not be surprised if the bathtub lacks the carrier, sealing rings, insulation, pipes, and drains. The chimney becomes significantly more expensive if, besides the chimney itself, a protective plate, pipes, and connections to the chimney must be calculated.
These important items – just examples – then are missing in the calculation.
2. incomplete calculation of ancillary construction costs
Most house providers prepare a small calculation of the most common ancillary construction costs. These cover the essential expenses such as building permit, surveying, and connection fees. Necessary paving work for access paths is generally included as well.
But often missing are: expert for construction supervision, additional earthworks, disposal trips, soil surveys, fencing, planting, entrance podium, house surroundings, etc.
It is fatal if a major item is simply forgotten.
3. the surprising issue of earthworks
“Earthworks are included in the house price!” You often read and hear this. Builders take the construction and service description only half literally, because the catch lies in the detail: ... up to 30 cm included ... This can mean that the cushion planned for special features is already eaten up by the earthworks.
4. incomplete construction and service description
The house construction is regulated by the contract for work and services and the construction and service description. But almost all builders cannot assess the positions in the construction service description.
Everything reads logical and reasonable: slab, windows, roof, and heating from brand manufacturers are named. However, there are gaps: for example, satellite dishes or LAN cables are rarely included in the “standard electrical” package, bathroom podiums are not listed, the same applies to the outdoor water tap. Nowadays, there are companies that keep the house price low but omit services such as construction site setup, containers, or portable toilets in the construction service description.
Since “turnkey” rarely includes painting and floor coverings, one must reckon with doing tasks like painting the lower roof cladding oneself.
Ignorance does not protect against costs.
4. inaccurate detailed planning of special features
An informed builder knows that everything costs money and that special features should be inquired about in advance. Thus, one knows the surcharge for shutters in the upper floor, color-foiled windows, the square meter price for tiles, and the surcharge for an outlet. These costs are included in the calculation. Later it turns out that the requested shutters can only be operated manually, the foiled windows look bad with white shutters, laying the selected tile size also entails extra costs, as does the colored grout and the stylish stainless steel corner trims, and it was forgotten that many halogen or LED spots cost more than simple ceiling outlets.
5. uncalculated price increases
Builders who inquire very early about costs, e.g. for floor coverings, are surprised at the start of construction that the prices no longer match. A square meter of flooring no longer costs €30, but €35.
With an architect, an average 5% price increase on a project costing €250,000 amounts to €12,500; with total costs of €300,000, it is already €15,000!
6. "You only build once!"
Most builders want to build only once in their life. The house is to be lived in into old age and maybe passed on to children or grandchildren later.
Thus, besides the usually unnecessary basement, a separate living unit is built where a child could possibly move in someday; or child rooms are planned oversized, provisions for a kitchen on the upper floor as well as sauna, WC, and second separate access in the basement; it could be that this room is needed eventually.
7. "A house without a walk-in shower is social housing"
For some builders, the house serves as a showcase of earned wealth and to keep up with or outdo acquaintances and colleagues.
So they quickly drive themselves into the cost trap of features that nobody really needs but are nice-to-have, each only costing an extra €1000; added up, this can quickly exceed €10,000 for things that one has lived very well without and that increase the quality of life even without them. The main price driver is the bathroom.
It becomes interesting when several friends are building and one feels pressured. It becomes problematic if partners disagree: one nags that their biggest dream has always been a conservatory; the other gives in if he gets the roof terrace.
8. wrong own work contributions
It happens that a missing €20,000 in the financing is positioned as own work by the banker so that the calculation matches or the interest rate improves. Before construction begins, hardly anyone thinks that they might not be able to perform these tasks themselves.
You can calculate that saving labor costs by own work requires about 10 weeks if you worked as fast as a trained and experienced craftsman (20,000€ at €50/h equals 400 h; a 40 h week means 10 weeks).
Furthermore, one might mean the work of a friend, father, or other helpers who are skilled craftsmen as own work. But due to illness or lack of time, the helping hand may not be able to help.
The consequence: what was planned as own work is done by a professional. Thus, labor costs drive the house cost higher.
9. wrong calculation of own work
“A can of paint doesn’t cost the world!” “Laminate costs €20 per sqm, so 100 sqm living space will cost €2,000.”
Anyone who believes that paint under €10 from Aldi will be fine is mistaken. At the first wall, you notice the paint doesn’t cover or is hard to apply. Besides, you need primer, possibly sanding material and plaster, various tools and materials, a large ladder, possibly a small scaffold. Not infrequently you reach a four-digit sum. If wallpaper is added, it becomes even more expensive.
The same applies to laminate: not only soundproofing, wedges, and skirting boards belong to the self-installation items, but cuts must also be calculated. With carpet, the weaving direction is crucial as to how much waste one has to buy on the roll.
10. "We'll do that later bit by bit!"
It’s certainly not a disgrace and well thought out if you initially forgo the carport and only prepare the base. A car can stand outside its whole life without a roof. However, many mean the garden and paving with this statement. But not having to look at a construction site out the window for several years is self-explanatory. Often, the desire for a proper terrace appears at the first warm sunbeam. Also, carrying sand from the yard into the hallway with shoes every day becomes annoying sooner or later. When the money runs out, additional financing is inevitable.
11. "We'll pay that from our ongoing salaries"
Topping out ceremony, preliminary interest, construction site setup, new lamps and furniture, kitchen, bathroom mirror and washbasin, small trees, moving, all can be paid from ongoing salaries. One forgets that salaries are not an ever-refilling cornucopia. Living expenses, rent, and supply costs continue during house construction. One must even reckon with additional car costs due to more frequent trips to the construction site.
Many make the mistake that too much “other expenses” must be paid from too little.
12. construction delay
Some believe their contract clause on delayed handover protects them and that the company must pay daily “wages.” This is rarely the case and does not apply to delays caused by weather. The logistics of house building companies are usually maxed out, so not much more can happen. Continuing construction in bad weather is often not advisable or drying phases must be observed. Thus, the company is protected.
If the builders cancel their apartment too early, unplanned costs arise such as temporary accommodation, furniture storage, and moving services.
13. factoring in money that doesn’t exist
The existing property isn't sold at the expected price or isn’t sold at all. Thus, money is missing in the house-building funds.
Some builders count on a financial injection from relatives. Perhaps it was promised. However, the aid may be smaller than expected or completely fail to materialize. Even with inheritance, the payout might only happen after years.
1. wrong basis of calculation
The best and worst example are the builders who start from the catalogue price, go to the bank, are told there are additional costs x, y, and z for the house construction. The sum is then financed. Later, during construction preparations, contract negotiations, and the start of building, it turns out that the catalogue price does not include the desired features.
A wrong basis also arises when prices are taken by hearsay without verifying them personally.
If builders exclude trades from the contract as standard because they think everything is cheaper online, they should not be surprised if the bathtub lacks the carrier, sealing rings, insulation, pipes, and drains. The chimney becomes significantly more expensive if, besides the chimney itself, a protective plate, pipes, and connections to the chimney must be calculated.
These important items – just examples – then are missing in the calculation.
2. incomplete calculation of ancillary construction costs
Most house providers prepare a small calculation of the most common ancillary construction costs. These cover the essential expenses such as building permit, surveying, and connection fees. Necessary paving work for access paths is generally included as well.
But often missing are: expert for construction supervision, additional earthworks, disposal trips, soil surveys, fencing, planting, entrance podium, house surroundings, etc.
It is fatal if a major item is simply forgotten.
3. the surprising issue of earthworks
“Earthworks are included in the house price!” You often read and hear this. Builders take the construction and service description only half literally, because the catch lies in the detail: ... up to 30 cm included ... This can mean that the cushion planned for special features is already eaten up by the earthworks.
4. incomplete construction and service description
The house construction is regulated by the contract for work and services and the construction and service description. But almost all builders cannot assess the positions in the construction service description.
Everything reads logical and reasonable: slab, windows, roof, and heating from brand manufacturers are named. However, there are gaps: for example, satellite dishes or LAN cables are rarely included in the “standard electrical” package, bathroom podiums are not listed, the same applies to the outdoor water tap. Nowadays, there are companies that keep the house price low but omit services such as construction site setup, containers, or portable toilets in the construction service description.
Since “turnkey” rarely includes painting and floor coverings, one must reckon with doing tasks like painting the lower roof cladding oneself.
Ignorance does not protect against costs.
4. inaccurate detailed planning of special features
An informed builder knows that everything costs money and that special features should be inquired about in advance. Thus, one knows the surcharge for shutters in the upper floor, color-foiled windows, the square meter price for tiles, and the surcharge for an outlet. These costs are included in the calculation. Later it turns out that the requested shutters can only be operated manually, the foiled windows look bad with white shutters, laying the selected tile size also entails extra costs, as does the colored grout and the stylish stainless steel corner trims, and it was forgotten that many halogen or LED spots cost more than simple ceiling outlets.
5. uncalculated price increases
Builders who inquire very early about costs, e.g. for floor coverings, are surprised at the start of construction that the prices no longer match. A square meter of flooring no longer costs €30, but €35.
With an architect, an average 5% price increase on a project costing €250,000 amounts to €12,500; with total costs of €300,000, it is already €15,000!
6. "You only build once!"
Most builders want to build only once in their life. The house is to be lived in into old age and maybe passed on to children or grandchildren later.
Thus, besides the usually unnecessary basement, a separate living unit is built where a child could possibly move in someday; or child rooms are planned oversized, provisions for a kitchen on the upper floor as well as sauna, WC, and second separate access in the basement; it could be that this room is needed eventually.
7. "A house without a walk-in shower is social housing"
For some builders, the house serves as a showcase of earned wealth and to keep up with or outdo acquaintances and colleagues.
So they quickly drive themselves into the cost trap of features that nobody really needs but are nice-to-have, each only costing an extra €1000; added up, this can quickly exceed €10,000 for things that one has lived very well without and that increase the quality of life even without them. The main price driver is the bathroom.
It becomes interesting when several friends are building and one feels pressured. It becomes problematic if partners disagree: one nags that their biggest dream has always been a conservatory; the other gives in if he gets the roof terrace.
8. wrong own work contributions
It happens that a missing €20,000 in the financing is positioned as own work by the banker so that the calculation matches or the interest rate improves. Before construction begins, hardly anyone thinks that they might not be able to perform these tasks themselves.
You can calculate that saving labor costs by own work requires about 10 weeks if you worked as fast as a trained and experienced craftsman (20,000€ at €50/h equals 400 h; a 40 h week means 10 weeks).
Furthermore, one might mean the work of a friend, father, or other helpers who are skilled craftsmen as own work. But due to illness or lack of time, the helping hand may not be able to help.
The consequence: what was planned as own work is done by a professional. Thus, labor costs drive the house cost higher.
9. wrong calculation of own work
“A can of paint doesn’t cost the world!” “Laminate costs €20 per sqm, so 100 sqm living space will cost €2,000.”
Anyone who believes that paint under €10 from Aldi will be fine is mistaken. At the first wall, you notice the paint doesn’t cover or is hard to apply. Besides, you need primer, possibly sanding material and plaster, various tools and materials, a large ladder, possibly a small scaffold. Not infrequently you reach a four-digit sum. If wallpaper is added, it becomes even more expensive.
The same applies to laminate: not only soundproofing, wedges, and skirting boards belong to the self-installation items, but cuts must also be calculated. With carpet, the weaving direction is crucial as to how much waste one has to buy on the roll.
10. "We'll do that later bit by bit!"
It’s certainly not a disgrace and well thought out if you initially forgo the carport and only prepare the base. A car can stand outside its whole life without a roof. However, many mean the garden and paving with this statement. But not having to look at a construction site out the window for several years is self-explanatory. Often, the desire for a proper terrace appears at the first warm sunbeam. Also, carrying sand from the yard into the hallway with shoes every day becomes annoying sooner or later. When the money runs out, additional financing is inevitable.
11. "We'll pay that from our ongoing salaries"
Topping out ceremony, preliminary interest, construction site setup, new lamps and furniture, kitchen, bathroom mirror and washbasin, small trees, moving, all can be paid from ongoing salaries. One forgets that salaries are not an ever-refilling cornucopia. Living expenses, rent, and supply costs continue during house construction. One must even reckon with additional car costs due to more frequent trips to the construction site.
Many make the mistake that too much “other expenses” must be paid from too little.
12. construction delay
Some believe their contract clause on delayed handover protects them and that the company must pay daily “wages.” This is rarely the case and does not apply to delays caused by weather. The logistics of house building companies are usually maxed out, so not much more can happen. Continuing construction in bad weather is often not advisable or drying phases must be observed. Thus, the company is protected.
If the builders cancel their apartment too early, unplanned costs arise such as temporary accommodation, furniture storage, and moving services.
13. factoring in money that doesn’t exist
The existing property isn't sold at the expected price or isn’t sold at all. Thus, money is missing in the house-building funds.
Some builders count on a financial injection from relatives. Perhaps it was promised. However, the aid may be smaller than expected or completely fail to materialize. Even with inheritance, the payout might only happen after years.